DTN Cotton Close: Market Diverges From Grains, Ends Higher

The cotton market ended modestly higher Tuesday despite the price erosion occurring in the Chicago grains. Both corn and beans were sharply lower as increased rains and moderating temperatures are helping those crops, while steep rains in the Delta are punishing cotton.

Over the weekend, Tropical Storm Claudette dumped copious amounts of rain across the U.S. Delta, but Tuesday lagging feeder bands continue to heavily shower that area, as well as the Southeast.

Some Traders are gearing up for July cotton’s delivery on Thursday. All participants must exit the spot market by Wednesday’s close or become entangled with the delivery process. At the start of Tuesday’s trading, spot July’s open interest roughly stood at 6900 contracts. July futures will expire on July 8.

Also, on Thursday, USDA will issue its weekly export sales report. Currently, old-crop sales are running 108% of the government revised target. Thus far for the 2020-21 season, Pakistan, the world’s number four producer, has been the biggest buyer.

The U.S. dollar was lower Tuesday as Fed Chairman Powell’s comments to certain congressional committees continues to echo the sentiments of transitory inflation.

For Tuesday, July closed at 84.22 cents, up 0.13 cent, December settled 85.64 cents, up 0.45 cent and March 2022 ended at 85.45 cents, 0.37 cent higher; estimated volume was 20,020 contracts.

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